Outsourced HR Solutions vs. In-House HR
For most businesses under 150 employees, building an internal HR department is expensive and underutilized. Here's how outsourcing HR compares on cost, expertise, and compliance.
Internal Team
- •Dedicated internal staff focused on your company
- •Deep institutional knowledge over time
- •On-site availability for employee issues
- •High fixed cost — salary + benefits + overhead
- •Expertise limited to one generalist's background
- •Compliance knowledge depends on individual's training
- •Scales poorly for small headcount changes
- •Time to hire + onboard before value is delivered
External Team
- ✓Access to a full team — not just one generalist
- ✓Broad compliance expertise across industries and states
- ✓Variable cost — scale up or down as needed
- ✓Immediate availability — no recruiting or onboarding
- ✓Stays current on employment law changes
- ✓Objective perspective on employee relations issues
- ✓Integrated background screening and drug testing
- ✓Proven HR policies and handbooks ready to deploy
Cost Comparison
| Cost Factor | In-House HR Manager | Outsourced HR |
|---|---|---|
| Base salary | $70,000–$95,000/yr | Not applicable |
| Benefits + payroll taxes | $20,000–$30,000/yr | Not applicable |
| Total annual cost | $90,000–$125,000+ | $24,000–$72,000/yr (retainer) |
| Time to start contributing | 30–90 days (recruiting + onboarding) | Immediate |
| Expertise depth | One person's background | Team with cross-industry experience |
| Compliance updates | Depends on self-education | Provider handles proactively |
| Flexibility to scale | Rigid — one FTE | Add/reduce services as needed |
What Outsourced HR Covers
Scott Galing — 30+ Years of HR & Compliance Experience
Do It Right Screening's parent organization, Executive Improvement Group, provides outsourced HR and business management services to small and mid-market employers across the U.S. Led by Scott Galing, EIG has guided businesses through HR buildouts, compliance overhauls, and workforce scaling for over three decades.
Learn About Executive Improvement GroupFrequently Asked Questions
What does outsourced HR include?
Outsourced HR typically includes employee onboarding and offboarding, HR policy development, employee handbook creation, compliance with federal and state employment law, benefits administration support, performance management guidance, and HR advisory services. Some providers also handle payroll administration and leave management. The scope is customized to what the business needs.
When does it make sense to outsource HR?
Outsourcing HR makes the most sense for businesses with fewer than 150 employees that cannot justify a full-time HR director, for companies going through rapid growth or change that exceeds current HR capacity, and for organizations in regulated industries where compliance expertise matters more than in-house headcount. It also works well as a bridge during leadership transitions.
Is outsourced HR less expensive than hiring an HR manager?
Usually yes. A mid-level HR Manager costs $70,000–$90,000 in base salary plus benefits, payroll taxes, and overhead — often $100,000+ all-in. Outsourced HR retainer arrangements typically run $2,000–$6,000 per month depending on scope, giving access to a full team rather than one generalist. For businesses under 100 employees, outsourcing almost always wins on cost.
Does outsourced HR work for businesses with complex workforce needs?
Yes, often better than in-house. Outsourced HR providers work across many industries and bring broader compliance expertise than any single internal hire. For businesses with multi-state workforces, seasonal staffing, or regulatory complexity (DOT, healthcare, government contracting), an outsourced team that has navigated those environments previously is often a stronger resource.
Talk to Our Team About HR Outsourcing
Whether you need a full HR function or just compliance support, we'll help you figure out what makes sense for your size and industry.